- In the first three months of the 2026-27 financial year (April to June), NS&I raised £1 billion of net financing
- Its target for the year is £15 billion (+/- £4 billion) – that’s £2 billion higher than the target for 2025-26
- The fact it’s falling short explains recent rate rises and Premium Bond prize rate boosts, and more could follow if it doesn’t attract enough cash
Sarah Coles, head of personal finance at AJ Bell, comments:
“This fundraising shortfall is why we saw the raft of rate rises last week – plus a Premium Bond prize hike in both July and September. NS&I is playing catchup and needed to do something to move the dial.
“Part of the issue is the Cash ISA effect. The announcement that the Cash ISA allowance would drop from £20,000 to £12,000 for those under the age of 65 from next April has prompted a dash for Cash ISAs, which means Cash ISAs soaked up much of the available savings in this period – including £12 billion in deposits into the accounts in April. It’s ironic that a move that the government hoped would make Cash ISAs less popular has transformed them into a money machine.
“NS&I is also suffering from the fact that the savings market has been so competitive in recent months, with online banks jostling to offer the best rate on the market. For much of this period its offerings have fallen well short of the most generous deals, and it has paid the price.
“We’ll have to wait and see whether this is enough to turn the tide, or whether there could be more rises on the cards. The fact that NS&I fixed-rate bonds have moved up the best-buy tables at a time when more people are fixing their savings could be a smart move. The easy access accounts aren’t as attractive as the best on the market, but this is by far the biggest savings market, so smaller moves could generate a bigger response. Meanwhile Premium Bonds have made a splash with two rises in the prize rate in quick succession, which could tempt more bond holders to boost their holdings.
“Bond holders will be crossing their fingers that savers prove hard to tempt at a time when rates are so competitive elsewhere, in which case there could be more rises on the cards, and the Premium Bond prize rate could rise again.”
